Concerns in relation to Finance Minister Michael Noonan’s intentions in the Budget for the tax treatment of the commercial property sector were to the fore in discussions between agents and investors with an interest in the Irish market at the Expo Real real estate fair in Munich last week.

Director at TWM Property Solutions Sean O’Neill told the Sunday Independent there was “nervousness” among international investors over potential changes being introduced on Budget day to Qualifying Investor Alternative Investment Funds (QIAIFs).

The funds, currently the main subject of a review being conducted by the Department of Finance, are regulated by the Central Bank, and have been used by several of the biggest players in the Irish property market to engage in home building, rental, retail, hotel and office development.

QIAIFs are typically exempt from Irish tax. Instead of taxing the fund, investors are taxed in the country they happen to reside. Therefore, Irish investors, for example, are typically taxed at 41pc.

Commenting on the potential consequences of any changes to the current structures, O’Neill said: “If taxes are brought in, there will ineveitably be some impact on pricing.

“But it will also damage Ireland’s reputation, as most funds have invested based on the structures put in place by the Government. If those structures are changed now, it would impact significantly on investors’ business plans. This is creating uncertainty about the Irish market that investors simply don’t like.”

Despite these pre-Budget concerns, O’Neill said those investors he and his colleagues in TWM had met in Munich remained “very positive” about Ireland.

Asked what he had gleaned in relation to the international investment community’s views on Brexit and its consequences for Ireland, O’Neill said: “From a property perspective , they feel Brexit will be a positive for the Irish market.”

Referring to the degree of appetite among investors for Irish property at Expo Real, he said: “The Irish market is very small in comparison to the wider European market. Foreign investors are finding it difficult to get product in the lot size and quality they require.”